Based on the following information, you are required to prepare the following: a) Adjusting entries necessary to correct the balances. b) Calculate the correct balances of the following: 1. Treasury Shares and Total Amount 2. Ordinary Shares and Total Amount

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Based on the following information, you are required to prepare the following:

a) Adjusting entries necessary to correct the balances.

b) Calculate the correct balances of the following:

1. Treasury Shares and Total Amount

2. Ordinary Shares and Total Amount

The shareholder's equity account of Macquin Company as of December 31, 2021 was as follows:
Ordinary Shares, P10 par, authorized 300,000 shares: 250,000
shares issued and outstanding
2,500,000
3,500,000
Share Premium
Retained Earnings
1,740,000
On June 1, 2022, Macquin reacquired 40,000 ordinary shares at P40. The following transactions
occurred with regard to these shares:
July 1
Sold 15,000 shares at P48.
Aug. 1
Sold 19,000 shares at P27
Sept. 1
Retired 1,000 Shares
The following entries were made by the company's accountant to record the preceding transactions.
Date
2022
Debits
Credits
June 1
Treasury Shares
1,600,000
July 1
Cash
720,000
Cash
513,000
Ordinary shares
10,000
Aug'1
Sept. 1
Cash
Treasury Shares
Treasury Shares
Treasury Shares
1,600,000
720,000
513,000
10,000
Transcribed Image Text:The shareholder's equity account of Macquin Company as of December 31, 2021 was as follows: Ordinary Shares, P10 par, authorized 300,000 shares: 250,000 shares issued and outstanding 2,500,000 3,500,000 Share Premium Retained Earnings 1,740,000 On June 1, 2022, Macquin reacquired 40,000 ordinary shares at P40. The following transactions occurred with regard to these shares: July 1 Sold 15,000 shares at P48. Aug. 1 Sold 19,000 shares at P27 Sept. 1 Retired 1,000 Shares The following entries were made by the company's accountant to record the preceding transactions. Date 2022 Debits Credits June 1 Treasury Shares 1,600,000 July 1 Cash 720,000 Cash 513,000 Ordinary shares 10,000 Aug'1 Sept. 1 Cash Treasury Shares Treasury Shares Treasury Shares 1,600,000 720,000 513,000 10,000
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